A liquid piston concept is proposed to improve the efficiency of gas compression and expansion. Because a liquid can conform to an irregular chamber volume, the surface area to volume ratio in the gas chamber can be maximized using a liquid piston. This creates near-isothermal operation, which minimizes energy lost to heat generation. A liquid piston eliminates gas leakage and replaces sliding seal friction with viscous friction. The liquid can also be used as a medium to carry heat into and out of the compression chamber. A simulation is presented of the heat transfer and frictional forces for a reciprocating piston and a liquid piston. In the application of an air compressor, with a pressure ratio of 9.5:1 and a cycle frequency of 20 Hz, the liquid piston decreased the energy consumption by 19% over the reciprocating piston. The liquid piston and the reciprocating piston exhibited a total efficiency of 83% and 70% respectively. The liquid piston demonstrated significant improvements in the total compression efficiency in comparison to a conventional reciprocating piston. This gain in efficiency was accomplished through increasing the heat transfer during the gas compression by increasing the surface area to volume ratio in the compression chamber. (C) 2008 Elsevier Ltd. All rights reserved.